An ultra-low mortgage is entering the UK market in what is a game-changer for those struggling to get on to the property ladder.
The decision to buy your first home is a big one. But in a cost of living crisis, coming off of the back of two years of sky-high inflation and rising prices across the board, from fuel to food, it’s been harder than ever to save.
Now, a brand new mortgage deal is being offered that can guarantee those who want to say goodbye to renting the chance to buy their first flat or house with a 99% mortgage.
You’ll only need to put up £5,000. A big change from a market where five per cent mortgages are the norm.
To put this in simple terms, you would only need £5,000 for a house valued up to £500,000. In a 5% scheme, you would need five times that at £25,000.
Who is behind the scheme?
Yorkshire Building Society is the building society bringing the deal to the open market for those who have never owned a home.
It’ll be available across England, Scotland and Wales, with the new mortgage available via brokers through Accord Mortgages; the lender’s intermediary-only arm.
For someone buying a their first property for £200,000, a £5,000 deposit would equate to 2.5% of the purchase price.
The remaining 97.5% would then be on a mortgage.
Who can take advantage and what are the terms?
Anyone who has never owned a house before. There is a cap on your age at the end of the mortgage term, with it capped at 70.
The mortgage is not available for new-build properties or flats, and the society said loans are subject to rigorous credit scoring and affordability checks.
Mr Merritt said: “While £5,000 represents a 1% deposit for those who need to borrow the maximum amount available, the key is that customers are still putting money into a deposit, they still have to demonstrate strong creditworthiness and pass an affordability assessment to be eligible for a £5,000 deposit mortgage.
